How to Make Financial Decisions, a Play in 1 Act

Amy Hoy

April 23, 2011

The biggest change in running your own business? Definitely a psychological one. You have to learn to think in terms of what you really want, and the opportunity costs between you and what you desire, which – all feelings of competence aside – almost none of us actually do on a day-to-day basis.

The fact is, we’re all lured by the shiny and impetuous, and it takes a long time to rope that desire and tame it for our own purposes.

To illustrate, consider this typical conversation between my husband and I:

HIM: What’s my hourly rate, for doing awesome visualization stuffs for an agency?ME: Like what?HIM: Dunno yet. But I told them it’d have to be really awesome, since I’m doing my own stuff. And it would have to be no more than 20 to 40 hours. Their stuff looked pretty cool.ME: Who are they?HIM: X Agency.ME:researches Their front page is flash.HIM: Guess that’s why they need me!ME:skeptical Their work doesn’t look that interesting.ME: Hmm, you’re right.ME: So… if you did a 20-hour project for them for $500 an hour, that’d only be $10,000. Or we could just do another Master Class. HIM: You’re right.HIM:faux pout Why are you so logical?

Why am I so logical? Cuz I’ve learned the hard way that if I don’t rule my magpie side with an iron fist, I am easily lured away by 5-figure sums. So I’ve learned to conquer my desire for the shiny with logic.

With the exception of one very awesome client, we’ve suffered (and our goals have suffered) every time we’ve let our heads be turned by a phat consulting budget. It just ain’t worth it.

Creating products, and learning to sell them, gives me a totally new type of math to work with:

20 hours of consulting? Hmm, well. Sure, $500/hr sounds like a lot, but we pull in nearly $10k from one JavaScript Master Class . And it’s infinitely more fun. And takes less time. And we get paid faster. And we make new connections with people who might become long-term customers. (And it has a greater impact, too, because we’re sharing our love of JavaScript and helping people make more awesome stuff, not just helping to promote some big brand.)

This is the no-brainer math of opportunity cost vs upside. This is the no-brainer math of freedom.

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